Higher education institutions, the subject of consumer scorecards from the Department of Education (ED), will soon have a snapshot tool of their own to use: the Safe Student Account Scorecard.
In its latest transparency effort, the Consumer Financial Protection Bureau (CFPB) has created a draft scorecard that higher education institutions could opt to use when evaluating financial partners, such as banks or financial services companies. Through March 16, 2015, the Bureau is soliciting feedback from colleges and universities, financial institutions, and consumers on the draft tool.
In theory, higher education institutions could use the scorecard as a guide when evaluating Requests for Proposal (RFPs) from potential financial partners, according to the CFPB. The draft scorecard would help users determine the specifics of arrangements with these companies, including financial aid disbursement accounts, deposit accounts linked to student identification cards, pay-for-performance bonuses, and marketing access on school property.
There are no “correct” answers on the scorecard, though the draft suggests determining whether a financial institution charges fees for student debit card transactions and institutes fair marketing practices, among other activities. Colleges that opt to use the scorecard as a guide could use some or all of the questions as they see fit.
In particular, the CFPB is looking for feedback in eight areas (detailed at the end of this page), including “How can institutions of higher education and students benefit from soliciting information on the features and cost of financial products marketed through a partnership with a financial institution?” and “How can the draft scorecard based on the FDIC Model Safe Accounts template be adapted to meet the needs of this specific market and to other types of products that institutions of higher education seek to offer to their students?”
The draft tool addresses many topics that were debated without eventual consensus during the program integrity negotiated rulemaking session last year. After facing criticism for overreaching regulation, ED has not released proposed rules on this topic. It is unclear if the Safe Student Account Scorecard initiative represents a shift in the administration’s direction and or if ED still intends to move forward with regulations in this area.
Publication Date: 1/15/2015